When deciding on the scope of thelitigation hold, be sure to consider infor-mation related to the damages claimedin addition to liability. Keep in mind thatestablishing damages in litigation oftenrequires more than is required duringthe adjustment of an insurance claim. Forexample, a hotel that was paid followingthe submission of a business interruptionclaim may need to preserve additional oc-cupancy data and historical rate details inorder to establish a lost profits claim dur-ing litigation. The substance of each claimwill dictate the scope of the litigation hold.

Given the overwhelming use of electronic communication, all litigation holds
are likely to require the preservation of
email communications. To assist with the
preservation process, identify the type of
email server used and how ESI is stored.

For personal email accounts, have the account owner immediately search deleted
and sent emails. For professional email
accounts, identify all persons within the
business who may have sent or received
relevant emails and immediately discontinue any automatic deletion of information for these accounts.

Communicate with an organization’s
Information Technology department and
any records custodians to review document
retention policies and ensure everyone is
aware of the litigation hold and what it entails. In situations involving large claims or
significant amounts of data, it may even be
necessary to hire an outside vendor to copy
hard drives, download data or otherwise assist with the preservation process.

Why are litigation holds important?
The prompt implementation of a litigation hold is prudent since it is a critical
factor in evaluating whether a party has
complied with its duty to preserve potential evidence. Some courts have even held
that the implementation of a litigation
hold is more than just a critical factor for
consideration and is in fact a requirement
imposed on all litigants. Regardless of the
jurisdiction, the proper implementation
of a litigation hold is well worth the time
and effort. Failing to properly preserve
relevant documents or ESI as soon as a
subrogation claim is anticipated may subject the insurer to sanctions.

The destruction of relevant information, whether intentional or unintentional
after a litigation hold should have been
implemented may be viewed as potential
grounds for a spoliation claim or defense.
Sanctions may be imposed in the form of
monetary fines, adverse inferences and in
egregious cases — the dismissal of claims.
Do not risk losing a recovery by waiting until a discovery request has been served. By
the time a formal request has been received,
it may be too late. Protect a subrogation
claim by implementing litigation hold directives early in the subrogation process.

Jessica M. Skarin is a senior associate in the
Tampa, Fla., office of Butler Weihmuller Katz Craig
LLP, and specializes in subrogation involving large
losses of all types, including claims for product liability, fire spread, construction defects, and indemnity, as well as negligent hiring and supervision.

“All truths are easy to understand once they are discovered;
the point is to discover them”